Time limit for the application of enforcement of a foreign arbitral award in China

As an international firm, we regularly deal with applications for recognition and enforcement of foreign arbitral awards in the Chinese Courts. These applications involve a two-stage approach:

1. submitting an application for the recognition of the award;
2. submitting an application for enforcement against the judgment debtor’s assets in China.

The time limit for an application for recognition and enforcement of a foreign arbitral award is two years from the time the arbitral award is issued. Usually there is no problem in complying with this time limit when filing an application for recognition. However, in the case of an application for enforcement, it is unclear whether the application should be submitted within two years from the date the arbitral award was issued, or the two year time limit starts to run anew from the date the court recognises the arbitral award. If the original two year time limit is still applicable, then there is always a risk the application for enforcement may not be able to be filed within time.

Fortunately, in 2013, a guidance by the Supreme Court of China [2013] MSTZ No. 43(the “Guidance Note”) sheds light on this issue. According to the Guidance Note, if there has been a court order recognising the award, the two year time limit for filing an application for enforcement of the award starts to run from the date of the court’s order of recognition. Further, the time limit can be interrupted / discontinued if, for example, a letter of demand for performance of debt is served on the respondent.
The above proposition later has been re-stated in another more superior judicial document (i.e. Interpretation on the Application of the Civil Procedure Law of the People’s Republic of China) issued by the same Supreme Court in 2015.

In view of the above, whenever there is likely to be a time bar issue for an application for enforcement of an award, it is advisable to send a letter of demand to the respondent to protect the time limit.